CBN imposes penalty on Banks for mutilated Naira notes

The Central Bank of Nigeria has warned Deposit Money Banks (DMBs) to stop including mutilated notes as part of their deposits with it, saying henceforth, composed banknotes discovered in the deposit of DMBs shall attract a penalty of 400 percent of the value.

Composed banknotes are mutilated currency notes comprising several parts of different banknotes of the same denomination.

Ahmed Umar, Director, currency operations department of CBN, in Abuja, said this in a circular issued over the weekend.

According to the circular, the directive took effect from April 1.

The parts of such currency notes are usually put together with the intention of receiving value.

Umar said that the existence of such banknotes in the economy falsified the true value of the currency in circulation.

He added that it could also be a channel for fraudulent activities.

He said that henceforth, composed banknotes discovered in the deposit of DMBs shall attract a penalty of 400 percent of the value.

“The management of the CBN observed with concern the increased number of composed banknotes deposited by DMBs and requested for replacement of such banknotes by members of the public,” CBN said.

“The existence of composed banknotes in the economy falsifies the true value of currency in circulation, and can also be an avenue for fraudulent activities.

“Consequently, any composed banknote discovered in the deposit of DMBs shall attract a penalty of 400 percent of the value.”